May 5th, 2015
Gas prices are expected to remain at their lowest levels since 2007, TIME reported. This is unusual since gas prices tend to increase during the summer months. But increased drilling in the Bakken formation and the Canadian tar sands coupled with more efficient fuel technology has created a glut in the supply chain being met with a plateaued demand in the market. While this is bad news for oil and gas companies, it's a welcome sight for drivers at the gas pump.
According to a recently released U.S. Energy Information Administration forecast, Americans can expect to pay an average of $2.45 per gallon from April through September. However, GasBuddy is predicting an even lower national average of between $2.15 and $2.35. In fact, Patrick DeHaan, senior petroleum analyst with GasBuddy thinks prices might plunge even further before the summer travel months begin.
"Once refineries complete their scheduled maintenance seasons and switch to summer formulations is complete, their output typically increases," DeHaan said. "Barring any unforeseen events—like refinery breakdowns or hurricanes—current supply and demand fundamentals could put more downward pressure on retail prices even during the summer driving season."
Hitting the road
With lowered gasoline prices, more Americans will be hitting the highways for summer road trips. The summer travel expectations should be a boon to hotels, restaurants and amusement parks as well as gas stations and oil refineries.
According to Bloomberg Business, La Quinta Holdings Inc., Chief Executive Officer Wayne Goldberg anticipates a very busy travel season for the hotel chain.
"We feel very good that all of the indications from a leisure standpoint are very positive," said Goldberg. "We see an economy improving."
More drivers on the road means more chances for tickets and accidents. Drivers should ensure they are not distracted during cross-country trips or other long-distance hauls.
CoverHound provides auto insurance at comparable prices from its easy-to-use website.